Site Navigation

Site Mobile Navigation

A Weak but Crafty Microsoft Response

Microsoft proposed a tactically shrewd but substantively shallow remedy yesterday for the antitrust violations that a federal court found it had committed. Judge Thomas Penfield Jackson ruled last month that Microsoft had violated the antitrust laws by using its monopoly over Windows, the operating system that runs personal computers, to block potential rivals. The government proposed two weeks ago that the judge break Microsoft in two -- creating a company that sells an operating system and a separate company to sell word processors, browsers and other application programs. In yesterday's filing, Microsoft rebutted the judge's findings that it had done anything wrong and, in any case, rejected the government's plan as disproportionate to the alleged violations.

Microsoft instead proposed constraints on its business practices. It would, for example, let computer manufacturers delete the icon for Microsoft's browser on the Windows screen that users see the first time they turn their machines on, giving Netscape's browser a better chance to attract customers. This proposal addresses the judge's finding that Microsoft had illegally blocked out the Netscape browser, which had the potential to develop into a threat to Windows's control over the software industry.

Microsoft also agreed to give computer manufacturers more control over the software they make easily available to computer users. The company is also willing to forgo some of the ways it punishes manufacturers and Internet companies that side with Microsoft's rivals.

These conduct remedies are welcome, but they are so porous they would still allow Microsoft to retaliate against companies that do business with its rivals and to block those that try to sell software that could challenge the Windows monopoly. Besides, the conduct remedies would be difficult to enforce, requiring constant government monitoring of the American software industry for years to come.

The remedies could, at best, prevent Microsoft from repeating sins of the past. But they could not redress the fundamental harm found by Judge Jackson -- that Microsoft used its Windows monopoly to thwart other operating systems from challenging Windows, thereby dulling innovation throughout the software industry. The only remedy for that problem is to inject competition into the software markets. The government plan would do that by putting the new applications company into position to develop its own operating system or to rewrite popular applications programs like Word for non-Windows operating systems, giving them a shot at attracting customers.

However weak in substance, the Microsoft response is legally crafty. Judge Jackson may be wary of embracing the government's remedy because the conservative judges on the appeals court might overturn such a drastic solution. Microsoft gave the judge added incentive to reject the government's structural remedy by threatening to tie the case up for months, pushing it beyond the elections, when the Democrats might no longer control the Justice Department. On the other hand, Microsoft offered to wrap up the trial quickly if the judge limited the penalty to conduct remedies.

Judge Jackson need not put speed above substance. Microsoft committed serious violations. Its half-hearted conduct remedies solve no important problem. Breakup is the right solution, and the judge can take all the time the parties need to come to the proper resolution.